It said 57 per cent of directors expect their business to expand over the coming year.

Directors are more positive about wages growth and decreasing unemployment.

AICD Chief Economist Stephen Walters said the increase in optimism follows improved prospects for the US economy after the initial shock of the election of President Trump.

Directors were also more positive about European economy after initial Brexit worries, he said.

"Maybe directors are realising that their worst fears weren't realised," he said.

Domestically the economy had "turned the corner".

The report found renewable energy sources topped the list of priority areas for infrastructure investment (53 per cent), followed by regional infrastructure (41 per cent) and roads (33 per cent).

It said 53 per cent of directors reported their boards were actively seeking to increase gender diversity while 77 per cent reported they were actively looking to increase diversity of skills.

Personal income tax was highest on the list of priorities for taxation reform (50 per cent), followed by company tax (47 per cent), multinational tax arrangements (43 per cent) and state-based taxes such as payroll tax (43 per cent).